To deploy a utilization management (UM) strategy, which enables a higher percentage of high-value specialist encounters while minimizing member frictions that may emerge from interventions into their specialist access.

Moving away from a UM strategy that relies most frequently on claims adjudication, especially retrospective claims adjudication, and toward one that leans more heavily on provider steerage to maximize high-value specialist visits. This can involve a combination of:
 

• Sharing as much of the capitated risk with PCPs and select specialists as possible
• Promoting more managed network forms (like HMO and HMO-POS)
• Offering incentives for patients to regularly visit their PCPs

Moving providers into a more central role in an organization’s utilization management strategy requires considerable financial, administrative, and data-infrastructure support from the organization’s risk-bearing partners. Providers are most effective at minimizing their patients’ low-value specialist visits when they bear at least some of the downside risk themselves, but the majority of PCPs and specialists have limited experience navigating the challenges that bearing risk entails. Provider inexperience bearing risk, and resistance to being the face of shaping specialist access for patients, are some of the biggest hurdles for shifting away from a UM strategy based on payer claims adjudication and toward one focused on provider steerage.

Directing members into more managed networks (like HMOs), which can help payers proactively shape specialist visits by their members, has also proven to be a challenge in an MA market increasingly dominated by consumer-focused PPO plans. Members value their ability to retain their existing provider relationships when choosing an MA plan over all other factors, which has made more managed network products less popular than PPO-style plans in the past five years.

Many providers have been understandably reticent to move into downside risk, given the added administrative, financial, and data burdens that succeeding in downside risk entails. There is also a frequently held sense among providers that their risk-bearing partners have not given them sufficient support to succeed in the past, and providers remain wary of downside financial exposure in the face of uncertain upside benefits.

4 actions risk-bearing entities (RBEs) should take to enable their provider partners in this role:

• Offer initial financial support to build up the administrative workforce necessary to handle the added reporting and paperwork burdens of operating in risk.
• Create a glidepath toward greater risk that allows their provider partners to gain experience before taking on significant downside exposure.
• Create a single, designated point of contact between themselves and each provider partner to avoid overwhelming providers that are likely managing similar relationships with other risk-bearing entities as well.
• Provide accurate, and timely, data about members to their provider partners, which will enable them to better assess which patients require what kinds of specialist access.
• Risk-bearing entities can also work more closely with their broker partners to explore network designs, like HMO-POS products, that can better enable their risk-bearing PCP partners by incentivizing members to collaborate more closely with PCPs while still allowing members to retain their preferred provider relationships.

3 actions that providers need to take before moving into this role:
 

• Determine if their referral network is sufficiently robust to cover the spectrum of care.
• Fully understand the terms of the risk contract.
• Assess their own in-house financial, administrative, and data capacities for success in risk in order to best leverage their risk-bearing partner’s support resources.

Zing Health offers managed Medicare Advantage plans across the Midwest, including a high percentage of Chronic Condition Special Needs Plans (C-SNPs), which are well suited to address the clinical profile of historically underserved populations. Zing has been uniquely successful at both continuing to grow their market share in an MA market increasingly dominated by large, national plans as well as at moving a high percentage of their provider partners into downside risk. Currently 45% of Zing’s members are in a relationship with a fully capitated provider.

The keys to Zing’s provider-centric UM strategy:
 

1. Glidepath to risk: Zing begins providers who have little experience in risk with upside-only risk, and puts them on an annual path toward full upside and downside risk.
2. Network design: Zing has an unusually high percentage of members in C-SNP plans, which reflects both the clinical profile of their target demographic and their strategy for getting more provider risk buy-in. C-SNPs are MA plans scoped specifically to better serve the needs of patients with certain conditions (like diabetes, COPD, CHF, ESRD, etc.) than general HMO- and PPO-style MA plans. Zing has found that it is easier to get their provider partners into full downside risk when those providers have more SNP members, because CMS pays more per member per month (PMPM) for SNP enrollees than for other MA members. This added PMPM SNP payment enables more pathways for provider financial success, as well as a wider breadth of clinical options for their patients. Zing has also been able to bend the cost curve for members in their PPO plans because their risk-bearing PCP partners typically steer their patients to Zing’s preferred specialists no matter what plan type their patients have.
3. Specialist risk: Zing has begun to bring select specialist groups into downside risk as well, by using the 80/20 rule: if 80% of a member’s annual care is from a particular specialty, effectively that specialist is acting as the coordinating clinical and financial node for that member. Zing works with these types of specialists, which tend to be nephrologists, oncologists, and cardiologists, as they would their PCP partners. This approach works particularly well when coupled with a C-SNP plan, in which the specialist addressing the chronic condition is both the coordinator of the patient’s care and the entity managing their total cost of care.
4. Value toolbox: For the remaining provider partners who are not sharing in Zing’s capitated risk, Zing uses an management services organization (MSO) to bring some other value-based tools to those providers.
5. Data: Finally, Zing offers the benefit of a broader, data-based picture of their patients to providers, as a benefit to taking on risk for their patients.

To develop compensation models that can continue to engage specialists while lowering the volume of their patient encounters.

Moving away from specialist compensation models that place a large emphasis on production, typically via work relative value units (wRVUs), and toward a compensation model that involves more rewards for having fewer, but more high-value, patient encounters. This can involve a combination of incentives around:
 

• Bonuses derived from some of the capitated risk savings for the patients
• Other quality metric payouts from the risk-bearing entity, like patient satisfaction, proper hierarchical condition category (HCC) coding, or patient access
• Lowering burnout by diminishing the incentives pushing specialists toward more and more patient encounters

Although complete value-based compensation for providers is still not the norm, it has historically been much less frequent among specialists compared to their PCP peers. Specialists have grown accustomed to the majority of their compensation coming from productivity metrics, typically wRVUs. Being compensated based on productivity, however, incentivizes maximizing the volume of patient encounters. Keeping specialists engaged while turning them away from this volume-based compensation model, which has proven so lucrative for many of them, is a significant financial and cultural challenge. Not only are many specialists reluctant to experiment with a greater mix of volume-reducing incentives in their compensation packages, but the vast majority of specialist physician organizations are inexperienced in the administrative, financial, and data practices required to succeed in risk-based contracts.

Bending the cost curve for health system-affiliated specialists can be particularly challenging, because financial incentives that are oriented toward reducing patient volumes can conflict with the financial imperatives of health systems to maintain sufficient patient volume to cover their facility-related costs. Even specialists who are not affiliated with health-systems have resisted the shift toward less-value centric compensation models, however.

Getting specialists to buy into compensation packages that incentivize limiting patient encounters remains one of the most difficult tasks MA organizations face when trying to bend their specialist cost curve.
 

1. Enable success in risk. MA risk holders need to decide which specialist groups would be best to share of their capitated risk with. Then, to foster success, the MA organizations must provide those specialist groups with the same administrative, financial, and data support that PCP groups in risk have benefited from.
2. Non-clinical incentives. Incentivizing certain non-clinical specialist work can also help align specialists to value in Medicare Advantage. Adding compensation for consistent and timely handoffs of patients from specialists back to their PCPs after the specialist work is completed leads to higher payment for their reduced number of patient encounters. Adding specific incentives for accurate and comprehensive HCC coding by specialists can also enable specialists to take a greater part in creating more complete and accurate patient risk-pool attribution.
3. Cultural alignment. Finally, specialist organizations and their risk-bearing MA partners should work together to create structures of volume-reducing incentives that best reflect the culture of the physicians in that organization. This could be incentives for longer high-value patient visits through metrics around patient satisfaction feedback, or added bonuses for timely, high-value patient access to incentivize reducing the volume of patients seen per day.

Broadlawn Medical (pseudonym) is a physician group focused on preventive care for seniors, and is comprised of primary and multispecialty clinics, including contracted medical management services. It provides care to over 750,000 patients across three states, and partners with multiple Medicare Advantage plans as well as traditional Medicare.

Broadlawn often takes on global, capitated risk in their contracts with MA plans. In this situation, Broadlawn deploys two different value-focused payment structures for their specialists, depending on whether or not the specialist is the primary coordinating entity for Broadlawn’s patients and the size of the patient population for that specialty.

A typical example of a value-focused payment for a specialist group that is the primary coordinating entity for their members is oncology, where Broadlawn passes along fully capitated risk that includes some or all of the following:

• Professional costs
• Radiology costs
• Chemotherapy/drug costs
• Radiation Oncology costs
• Inpatient and outpatient hospital costs

For specialist groups that are not the primary coordinating entity for Broadlawn’s members, Broadlawn uses a bundled payment model that incorporates risk for the above costs but assessed on a per patient/episode of care.

Physician compensation includes a bonus from any savings relative to the capitated payment, plus more targeted incentives (if the capitated goals are met) that align with Medicare Star ratings:
 

• Patient satisfaction via survey data
• Patient access within a specified amount of time
• Shared clinical data with the PCP
• Hospital readmission reductions
• Adherence to evidence-based clinical guidelines for treatment

To be as efficient as possible at allocating specialist resources for the MA membership, while maintaining or improving population-level clinical outcomes.

Building out a data infrastructure that can more accurately and comprehensively paint a data picture of each member so they can be placed in a risk pool that best reflects the type and amount of specialist resources. Building out this data infrastructure can involve a number of moments, including:
 

• better coding practices from providers after each patient encounter to contribute to the actionable set of data about each member
• better payer data analytics that can accurately place each member into the proper risk pool
• effective data sharing from the payer to their provider partners, at the point of care, which will enable frontline providers to properly steer patients toward high-value specialist encounters and limit low-value episodes.

Creating a data infrastructure that can be effective at orienting specialists toward higher-value clinical encounters requires significant cross-stakeholder coordination before the actual patient encounter. There are three areas where this has proven particularly challenging for MA operators:
 

• Gathering and synthesizing sufficient data to paint an actionable image of the patient. Specialists have historically not produced as much timely and comprehensive coding of their patient encounters as their PCP peers, while payers have historically faced challenges putting this patient data together in a way that providers find enabling in their shifts toward value.
• Creating structures of action around the patient data that helps orient providers to higher-value clinical interventions. Effective interweaving of the risk-pool strategy (e.g., how many cohorts, what the distinguishing criteria are) with the operational approaches for each pool (e.g., what the care delivery model is for each cohort) is a complex, and typically novel, effort for most MA organizations.
• Developing communication strategies that make the data, and its significance, actionable. Providers are often overwhelmed not just by the amount of patient data being shared with them, but by the many different ways it is being shared with them by their many different partners. The MA stakeholders that are sharing patient data with their provider partners need to find ways to share data so it is simple to use and accessible at the point of care. Education about the best care delivery practices to follow for high-value care, based on that data, has also been lacking.

Medicare Advantage organizations must be able to paint an accurate, timely, and comprehensive data picture of their members to be able to deploy specialist resources efficiently. Building that data picture requires a high level of cross-stakeholder collaboration, however. This collaboration includes:
 

1. RBEs incentivizing specialists into better HCC coding practices. Creating financial incentives for specialists to be more attentive to their patient coding typically leads to more accurate and complete member data. These data gathering efforts are more challenging with members in PPO plans, however, because risk-holders possess fewer financial levers with out-of-network specialists. Plans can reach out directly to their PPO members with financial incentives for seeing an in-network PCP, who in turn can steer members toward in-network specialists, but this has generally proven to be less effective than the gatekeeping function that PCPs play for access to specialists in more managed plan types.
2. Proactive conversations between plans and providers about preferred type, and delivery, of patient data. While there are some provider organizations (both primary care and specialist) that are experienced enough with risk that they prefer the raw patient data the plan has gathered, most providers prefer some shaping of it. Plans and providers need to maintain ongoing conversations about what kind of data best supports the provider’s value-orientation, as well as how providers prefer to receive that patient information: digital portals, EHR overlays accessible at the point of care, or even a dedicated phone contact.
3. MA stakeholders need to work together to develop the organizational strategies, risk attribution profiles, and tactical care delivery practices that constitute the structure of their risk pooling efforts. These ongoing conversations among providers, payers, and data teams will determine (among other things) how to most effectively allocate specialist resources based on patient risk attribution and how to best communicate that guidance to coordinating entities.

Palmer Health (pseudonym) is a nonprofit community health system that operates four hospitals in the northwestern United States. The organization also includes several health plans (including Medicare Advantage) and a multispecialty group, which combined make Palmer Health the largest multispecialty physician group in the region. In 2020, Palmer partnered with a third-party organization to help the health system move toward a more value-based care orientation.

Palmer Health deploys two data-centric approaches to control their specialist spend:
 

• Better clinical documentation. Palmer breaks down their member population into five “risk cohorts,” based on members’ Milliman Advanced Risk Adjusters (MARA) scores. Palmer offers its provider partners a pocket guide to best approaches for each of the different cohorts, along with an updated list of which members are in each of them. Palmer has been able to create accurate MARA scores for its members, in part, because Palmer ties a portion of its specialist partners’ compensation to metrics around accurate and timely HCC coding. This includes documenting patient improvement over time, which Palmer provides a formula to calculate. Palmer pays out the bonuses for better coding to the entire specialist group, not to individual physicians.
• Closing the loop. To create a greater proportion of high-value patient encounters with their specialists, Palmer Health pays a higher wRVU rate for patients with a higher risk adjustment factor (RAF) score who are experiencing longer wait times, while sending notes to their specialist partners to send patients with low RAF scores back to their PCPs. Specialists appreciate this bonus structure, according to Palmer, because it allows them to see fewer patients and spend more time with those they see. However, the biggest challenge to the success of this approach has been getting specialists to stay on top of their documentation well enough to know which patients are ready to be sent back to their PCPs.